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Euro woes flatten Carpetright

Carpetright lowers profit guidance for the seventh time in 18 months
April 25, 2012

Continuing weakness in its European stores and disappointing bed sales saw Carpetright deliver a seventh profit warning in 18 months, despite signs of improvement in its UK floor covering business. Pre-tax profits for the year are now expected to be £3m-£4m down from previous guidance of £6m-£7m, and we still see no reason to own the shares.

IC TIP: Sell at 594p

Like-for-like carpet and laminate sales climbed 6 per cent in the fourth quarter, but overall like-for-like sales climbed more slowly, up 1.4 per cent as fewer customers bought insurance products. Overall sales slipped 4.2 per cent as a result of store closures and an 8 per cent sales slump in Europe, worsened by currency movements.